Compliance Tests-An Explanation
|
|
- Cecily Ferguson
- 8 years ago
- Views:
Transcription
1 Compliance Tests-An Explanation This document details the various compliance tests performed on your plan. Specifically, this document details a plan s compliance with Internal Revenue Code (IRC) Section 402(g), 401(k) and 401(m), 415(c), 410(b), and 416. IRC Section 402(g)-Excess Deferrals An excess deferral is the amount a participant defers to a 401(k) plan for a calendar year that is in excess of the limit on elective deferrals for that taxable year which is defined by IRC Section 402(g). In 2001, the limit on elective deferrals is $10,500. This number is indexed each year for cost-of-living increases. In 2002, the limit is $11,000. The amount a participant defers to the plan for 2001 that is in excess of the $10,500 is an excess deferral. Excess deferrals and any income should be returned to the participant by April 15 following the calendar year of the excess deferral. The excess deferrals are taxable to the participant in the tax year in which they were made. IRC Section 401(k) and 401(m)-Actual Deferral Percentage and Actual Contribution Percentage (ADP and ACP) Tests Elective deferrals, after-tax contributions, and matching contributions to a 401(k) plan are subject to certain nondiscrimination requirements that must be met if a plan is to maintain its qualified status (IRC Section 401(k) and 401(m)). Elective deferrals and the total after-tax and matching contributions satisfy these requirements if they pass the actual deferral percentage (ADP) tests and actual contribution percentage (ACP) test respectively. The ADP test provides that the average percentage of pay deferred by highly compensated employees (HCE) cannot exceed the average percentage of pay deferred by non-highly compensated employees (NHCE) by more than a prescribed amount. For plan years beginning after 12/31/96, an individual will be considered an HCE if: 1. the individual was a more than 5% owner of the Employer during the current plan year or 12 months immediately prior to the beginning of the plan year; or 2. the individual had compensation in excess of $85,000 during the 12 months immediately prior to the beginning of the plan year and, if elected by the employer, was in the top 20% of employees by compensation for the 12 months immediately prior to the beginning of the plan year. As of 1/1/2002, the compensation limit will be $85,000. To determine the average percentage of pay deferred, a ratio called the actual deferral percentage (ADR) for each eligible employee must first be calculated. The ADR is the ratio of the employee s elective contributions to the employee s compensation (In 2001, compensation is limited to $170,000; in 2002, the compensation limit is $200,000). Eligible employees are then divided into two groups for testing purposes: eligible HCE s and eligible NHCE s. To determine the ADR for each group, add together the ADR for each eligible employee in the group and divide the sum by the number of eligible employees in the group (including those with an ADR of zero-eligibles but not participating). The Small Business Job Protection Act of 1996 made several changes to the discrimination test process for 401(k) plan years beginning in A new testing method, called the prior year testing method, bases the ADP and ACP tests on the Non-Highly Compensated Employees (NHCEs) prior year s ADP and ACP results. The prior year testing method is optional for the Plan Year tests, so the old method (the current year testing method ) can still be used during these years without restriction. However, for the Plan Year beginning after December 31,
2 2001, either the current year testing method or the prior year testing method must be chosen and, as a general rule, that method must continue to be used unless a change is approved by the IRS. The IRS has approved a change in testing method under limited circumstances. A plan that is using the prior year testing method may switch to the current year testing method for any subsequent year. However, for plan years beginning after December 31, 2001, the plan may only switch from the current year testing method to the prior year testing method if, as a general rule, the current year method has been used for each of the preceding five plan years (or, if less, the number of years the plan has been in existence). Please note that a decision to use the prior year testing method, though it may provide the best test results at this time, may restrict the plans ability to change testing methods in the future. Under the prior year testing method, one is able to predict, in advance, the maximum elective deferrals that can be made by HCEs in a particular plan year. The prior year testing method requires that the HCEs ADP for any plan year be limited to the greater of: 1. the ADP for NHCEs in the prior plan year multiplied by 1.25; or 2. the lesser of: a) the ADP for NHCEs in the prior plan year x 2; or b) the ADP for the NHCEs in the prior plan year +2. Using the current year testing method, the ADP test is satisfied with respect to the elective deferrals if the HCE s ADP for the plan year is limited to the greater of: 1. the ADP for NHCEs in the current plan year multiplied by 1.25; or 2. the lesser of: a) the ADP for NHCEs in the current plan year x 2; or b) the ADP for the NHCEs in the current plan year +2. The ACP test is identical to the ADP test except that an actual contribution percentage (ACP) replaces the ADP. The ACP is simply the ratio of the employee s total after-tax and matching contributions to the employee s total compensation. Plans that do not have these contributions are not subject to the ACP test. If the alternate test (#2 above in both methods) must be relied upon to pass both the ADP and ACP, then a special aggregate limit applies. In these situations, an additional nondiscrimination test must be performed to determine if the multiple use of the alternate limit exceeds the permissible aggregate limit. IRC Section 415(c)-Annual Additions Limitation Defined contribution plans, including 401(k) plans, are generally subject to certain limitations on total annual additions. In particular, annual additions to defined contribution plans may not exceed the lesser of $35,000 or 25 percent of the participant s gross compensation (IRC Section 415(c)). The $35,000 limit will be adjusted for cost-ofliving increases according to the provisions included in the General Agreement on Tariffs and Trade (GATT). The limit on. Annual Additions in 2002 will be the lesser of $40,000 or 100 percent of the participant s gross compensation (IRC Section 415(c)). Annual additions include employer contributions, employee contributions (after-tax contributions), elective deferrals and forfeitures that are reallocated to employees.
3 IRC Section 410(b)- Participation IRC Section 410(b) deals with preventing discrimination regarding which groups of employees are covered by the plan. This regulation only applies if a plan is excluding a certain group of employees from participating in the plan or a feature in the plan is not provided to all employees (i.e., last day requirement to receive a contribution) Each component of the plan (elective deferrals, matching contributions, and profit sharing contributions) must pass the 410(b) ratio percentage test. The ratio test requires that a plan benefit a percentage of nonhighly compensated employees equal to 70% or more of the highly compensated employees who benefit under the plan. Those employees not yet eligible for the plan because of the plan s age and service requirements or employees who are covered by a collective bargaining agreement are not required to be counted for purposes of this test. If the plan fails the ratio/percentage test, it may still pass under a more complicated testing procedure called the Average Benefits Test. The Average Benefits Test is beyond the scope of this discussion. IRC Section 416-Top Heavy Test A plan is top-heavy if more than 60% of the account values are attributed to Key Employees. A Key Employee means an employee who at any time during the plan year or any of the four preceding plan years (subject to dollar limitations for those years), is: 1. An officer earning more than $70,000 (increases to $130,000 in 2002); 2. More than 5% owner; 3. 5% or less owner but more than 1% owner and earns more than $150,000 in one year from the employer; or 4. Among the ten highest percentage owners in the plan (Owning at least.5%) and earns more than 100% of the defined contribution limit ($30,000). The effects of a plan being top-heavy are as follows: 1. In general, a minimum contribution equal to 3% of total compensation must be allocated to all eligible employees who are employed on the last day of the plan year. To determine if the top-heavy minimum has been satisfied, salary deferral contributions and matching contributions are not recognized. 3. Account values attributable to employer contributions must vest according to the Top-Heavy vesting schedule if it is more rapid than the standard vesting schedule as shown in the plan document. Match Verification The match verification that may have been provided is based on an annual computation period with the formula specified in your plan document, or the formula that was supplied on your 5500 Questionnaire. The following possible reasons may account for discrepancies: 1. The computation period used for calculating the match was more frequent than the computation period in the Plan Document. If this is the case you may consider one of the following options for future plan years: a. Change the frequency of the match calculation to coincide with the document. b. Change your Plan Document computation period to coincide with the frequency of the match calculation. Please notify us in writing if you wish to change the computation period on your Plan Document.
4 However, if your document specifies an annual computation period for the tested plan year, then the appropriate adjustments should be made as indicated on the match verification report. Please send a payroll adjustment file for this purpose to your case manager or contact me with any questions. 2. Eligible compensation (compensation from an employee s date of entry through the last day of the plan year, or date of termination) was not provided and the assumption was used to prorate compensation. For example: John Doe earns $40,000 for the entire plan year and is eligible to enter the plan on July 1. His prorated eligible compensation would be $20,000. However, if John actually made $10,000 in the first six months of the year and $30,000 in the last six months, his eligible compensation would be $30, Compensation for plan purposes was not limited under Section 401(a)(17). The limit for 2001 is $170,000. For example: John Doe earns $500,000 for the entire plan year, the compensation would be limited to $170,000 for plan purposes. (i.e. deferral, and match calculation). 4. The calculation period in the document which was also used in practice was more frequent than annual. Please review to ensure that the match formula was applied correctly for each computation period. Employee Data Errors The following is a summary of the assumptions made for the errors listed on the data errors file. Any changes to the indicated assumptions may require re-testing and additional testing fees. Employee With Contribution and Zero Compensation: (Not included in testing) The employee is assumed to have been terminated in the prior plan year. All contributions are considered ineligible and are not included in all applicable testing. See Ineligible Contributions. Eligible Employee With Zero Compensation: (Not included in testing) The employee is assumed ineligible during the plan year and is not included in applicable testing. Contributions Greater then Compensation: (Included in testing) See Excess Annual Additions for contributions above the described limit. Ineligible Employee with Contributions: (Not included in testing) The employee and all contributions are assumed ineligible during the plan year and are not included in all applicable testing. See Ineligible Contributions. Match Contribution and Zero Deferral: (Included in testing) All contribution amounts are assumed eligible during the plan year and are included in all applicable testing. Also see Match Verification. Deferrals and No Match but Eligible: (Included in testing) All contribution amounts are assumed eligible during the plan year and are included in all applicable testing. Also see Match Verification. Current Term with Zero Compensation: (Not included in testing) The employee is assumed ineligible during the plan year and is not included in applicable testing. Employee Pre-tax contrib. Exceeds Plan Limit: (Included in testing) Our tests indicate that one or more of your employees has exceeded the deferral limit specified in your plan document. It is your responsibility to limit each participant s deferral percentage to the plan maximum.
5 Annual Discrimination Testing 401(k) and (m) Test Failure: Options to Pursue Option Evaluation of Option Who Takes the Lead 1. Target the "0's" (unenrolled) and 1. Improvement will result, but 1. We can look at the test and "lows" (low contribution rates) this option does not Design a mailer if you are with mail to their homes and guarantee testing success. Interested. special meetings. The "0's" are likely to be low wage workers in small, "remote" locations. 2. Amend the plan to incorporate 2. This amendment could be 2. We will prepare the plan a "bottom-up QNEC." This completed this year. Operation Amendment if requested. would permit small contributions of the amendment is permissive Use of the amendment will to low income participants in not mandatory. Use of the Subsequently be determined by order to make the test pass. amendment will cause the test Reviewing each year's test to pass and is usually low cost Results. to use but it requires 100% vested contributions to be given to a few low paid, possibly terminated or part- time participants. 3. Incorporate an automatic enroll- 3. This feature would automatically 3. You should decide whether ment or "negative" election procedure into the plan. enroll every eligible employee for 2 or 3% of his or her pay. Or not to use automatic enrollment. We will call you in (Employees can subsequently opt out.) Order to review the alternatives. 4. A "safe harbor" match of $1 for 4. No 401(k) or (m) tests would 4. You should decide. $1 on the first 3% of pay and 50 have to be run. cents on the dollar for the next 2% of pay could be written into the plan. (Must be fully vested when made.) 5. Limit the Highly Compensated 5. Would solve the testing problem 5. You should decide. contributions but severely restrict the plan's usefulness to HC's. 6. Use the match as a "Qualified 6. Helps the test incrementally. 6. You should decide. Matching Contribution" or QMAC Not really a solution but definitely of some help. 7. Reduce the match for HC's 7. May help the test but is sure 7. You should decide. to offend HC's.
NONDISCRIMINATION SAFE HARBOR ALTERNATIVES FOR 403(b) AND 401(k) PLANS
FOR ADMINISTRATOR USE ONLY. NOT FOR DISTRIBUTION TO EMPLOYEES. NONDISCRIMINATION SAFE HARBOR ALTERNATIVES FOR 403(b) AND 401(k) PLANS Retirement plans of private employers are subject to a variety of nondiscrimination
More informationDetailed information on safe harbor contributions to 401(k) plans
Retirement Plan Services Detailed information on safe harbor contributions to 401(k) plans Safe harbor brief explanation: A plan sponsor may elect to contribute safe harbor minimum contributions to a 401(k)
More informationNONDISCRIMINATION TESTING
ADVANTEDGE UNDERSTANDING NONDISCRIMINATION TESTING NONDISCRIMINATION TESTING Nondiscrimination testing is the process of identifying when benefit limits are exceeded. Essentially, nondiscrimination regulations
More informationbulletin Discrimination Testing: A Closer Look THE PA CHALLENGE: WINNER! In this issue
Administer Your Plan Wisely is an educational campaign designed to help Plan Administrators manage their plans effectively. bulletin In this issue The PA Challenge Discrimination Testing: A Closer Look
More informationRetirement Plan Administration. Mercer HR Services. SERVICE 401(k) Compliance Testing Manual. A resource for testing information
Retirement Plan Administration Mercer HR Services FULL 401(k) SERVICE 401(k) Compliance Testing Manual A resource for testing information Copyright 2005 by Mercer HR Services. All contents are the confidential
More informationNONDISCRIMINATION TESTING
Presents NONDISCRIMINATION TESTING TRAPS FOR THE UNWARY Felicia A. Finston ffinston@wifilawgroup.com Purpose of Nondiscrimination Testing Ensure plan does not discriminate in favor of highly compensated
More informationTesting 101: Understanding Compliance Testing. Susan M. Wright, CPA, APM, Director of Compliance & Consulting Jason Frey, QPA, Consultant
Testing 101: Understanding Compliance Testing Susan M. Wright, CPA, APM, Director of Compliance & Consulting Jason Frey, QPA, Consultant Topics of Discussion The Annual Information Form The importance
More informationAverage Deferral Percentage test (ADP test) All other employees are considered Non-HCEs.
PART 2 Compliance Testing THE BASICS Your 401(k) plan must be examined regularly to confirm that it is in compliance with the tax code and ERISA regulations. The primary purpose of this compliance testing
More information401(k) Plan Executive Summary
401(k) Plan Executive Summary January 2016 3000 Lava Ridge Court, Suite 130 Roseville, CA 95661 Tel 916.773.3480 Fax 916.773.3484 6400 Canoga Avenue, Suite 250 Woodland Hills, CA 91367 Tel 818.716.0111
More informationPlan Sponsor 401(k) Retirement Plan Analysis
Plan Sponsor 401(k) Retirement Plan Analysis Table of Contents: 3 Controlled Groups & Affiliated Service Groups 4 Plan Design Alternatives 5 401(k) Testing Requirements 6 ADP & ACP Testing 7 Top Heavy
More informationMy recordkeeper takes care of the plan s nondiscrimination. Nondiscriminatory Matching Contributions: More Than Simply ACP Testing. article Retirement
article Retirement Nondiscriminatory Matching Contributions: More Than Simply ACP Testing Actual contribution percentage (ACP) testing is only one part of nondiscrimination testing of matching contributions,
More informationHow to Correct ADP/ACP Test Failures after the Statutory Correction Period
How to Correct ADP/ACP Test Failures after the Statutory Correction Period This white paper is written for 401(a) defined contribution plans that offer the Internal Revenue Code ( IRC ) 401(k) and/or 401(m)
More informationRetirement Services Instructional Guide
Retirement Services Instructional Guide Index of Content Click the topic you want to learn more about! Introduction to Your Quarterly Package Paychex Retirement Services for Employers Website Employee
More informationThe MC Academy The Employee Benefits and Executive Compensation Series. Qualified Plans Part 2
The MC Academy The Employee Benefits and Executive Compensation Series Qualified Plans Part 2 June 4, 2013 Nondiscrimination Nondiscrimination in General Qualified Retirement Plans may not Impermissibly
More informationEmployer Frequently Asked Questions
Employer Frequently Asked Questions Contributions How much can a participant defer? The IRS limits the amount a participant can defer in a given calendar year. This is the 402(g) limit which is an indexed
More informationSection 401(k) and(m)-adp/acp Tests-Correction Methods under EPCRS CPE 2013
Section 401(k) and(m)-adp/acp Tests-Correction Methods under EPCRS CPE 2013 By: Felecia Poree and Al Reich Reviewers: Susan Tarrant, Marty Friedlander, Bonnie Schaumberg and Mitch Waters Overview INTERNAL
More informationSUMMARY PLAN DESCRIPTION
Qualified Retirement Plan SUMMARY PLAN DESCRIPTION 150838 Rev. 11/08 Qualified Retirement Plan and Trust Summary Plan Description TABLE OF CONTENTS INTRODUCTION...iii DEFINITIONS...1 Beneficiary...1 Catch-up
More informationMandatory Disaggregation Permissive Disaggregation Otherwise Excludable Employees Consequences of Using Disaggregation. How Disaggregation Works
410(b) Disaggregation Tips and Pitfalls Kimberly B. Martin, APA, CPC, QPA Education Director, NIPA Kim Martin, APA, CPC, QPA Director of Education, NIPA, Case Manager, Pension Plan Professionals, Inc.
More informationplans maintained by professional groups such as law firms and physicians, engineers, dentists, et al.
Actual Deferral Percentage (ADP) Testing Richard D. Landsberg, JD, LLM, MA, CLU, CPM, ChFC, RFC, AIF Director Advanced Consulting Nationwide Financial Introduction Qualified plans are subject to special
More informationEmployee Benefit Plans Nondiscrimination Compliance Testing Practice Aid
Employee Benefit Plans Nondiscrimination Compliance Testing Practice Aid This ing practice aid is a matrix designed to assist auditors in determining which types of compliance ing is required for which
More information401(k) Boot Camp Part 2 Getting Money Into the Plan
401(k) Boot Camp Part 2 Getting Money Into the Plan November 12, 2014 Presenter: Nancy J. Manary, Director Benefits Consulting Verisight, Inc. 401(k) Boot Camp Part 2 Part 1 Getting People Into the Plan
More informationSmall Business Plans Business owner guide
Small Business Plans Business owner guide Contents 1 Why Consider a Retirement Plan? 2 SEP Plan 4 SIMPLE IRA 6 Age-Weighted Profit Sharing Plan 8 New Comparability Profit Sharing Plan 10 Safe Harbor 401(k)
More informationftwilliam.com Safe Harbor Basics 10/28/2015
ftwilliam.com Safe Harbor Basics 10/28/2015 Agenda ADP safe harbor requirements ACP safe harbor requirements Top Heavy safe harbor plans Reducing or suspending safe harbor contributions for the current
More information401(k) Plans for Business Owners
401(k) Plans for Business Owners Flexible options for companies of all sizes Because large corporations spearheaded the growth of 401(k) plans, many closely held business owners assume this type of plan
More informationThis Checklist is not a complete description of all plan requirements, and should not be used as a substitute for a complete plan review
401(k) Plan Checklist This Checklist is not a complete description of all plan requirements, and should not be used as a substitute for a complete plan review For Business Owner s Use DO NOT SEND THIS
More informationWhat s the Easiest Way to Pass a 401(k) NONDISCRIMINATION TEST? TRANSAMERICA. The retirement answer.
What s the Easiest Way to Pass a 401(k) NONDISCRIMINATION TEST? TRANSAMERICA. The retirement answer. Skip it with SAFE HARBOR contributions. It s true. A company can forego 401(k) nondiscrimination tests
More informationCORRECTION METHODS FOR 401(k) FAILURES. Avaneesh Bhagat, Group Manager Sherri Morris, Tax Law Specialist Employee Plans Voluntary Compliance
CORRECTION METHODS FOR 401(k) FAILURES Avaneesh Bhagat, Group Manager Sherri Morris, Tax Law Specialist Employee Plans Voluntary Compliance TABLE OF CONTENTS OVERVIEW....... 3 EMPLOYER ELIGIBILITY FAILURE.......
More informationQualified Retirement Plan
Qualified Retirement Plan SUMMARY PLAN DESCRIPTION 150838 02/13 This page intentionally left blank. Qualified Retirement Plan and Trust Summary Plan Description TABLE OF CONTENTS INTRODUCTION... iii DEFINITIONS...
More informationSTART" - Save Today and Retire Tomorrow. Solutions to Enhance Retirement Security for Executives
START" - Save Today and Retire Tomorrow Solutions to Enhance Retirement Security for Executives Erik Pienkos Senior Manager Benefits Consulting Practice erik.pienkos@gt.com Background Survey data indicates
More informationSECTION 401(k) COMPLIANCE CHECK QUESTIONNAIRE INTERIM REPORT February 2012
SECTION 401(k) COMPLIANCE CHECK QUESTIONNAIRE INTERIM REPORT February 2012 Internal Revenue Service TE/GE Employee Plans Employee Plans Compliance Unit (EPCU) TABLE OF CONTENTS EXECUTIVE SUMMARY...3 OVERVIEW...7
More informationINSTRUCTIONS FOR 403(b) PROTOTYPE PLAN AND COMPLETION OF 403(b) ADOPTION AGREEMENTS
INSTRUCTIONS FOR 403(b) PROTOTYPE PLAN AND COMPLETION OF 403(b) ADOPTION AGREEMENTS The 403(b) Prototype Plan authorizes elections, either by adoption agreement selection or by other action. Each election
More informationCompliance. Steps plan sponsors can take to keep their defined contribution plans in compliance with the IRS.
Compliance Taking Corrective Measures Steps plan sponsors can take to keep their defined contribution plans in compliance with the IRS. By Carolyn Trenda and Richard Menson, McGuireWoods LLP In the January/February
More informationPEO and Multiple Employer Plans
PEO and Multiple Employer Plans by: Alan Moore, CFO Slavic Investment Group Retirement Plans A retirement plan is a written document defining benefits provided by the employer on a nondiscriminating basis
More informationAVOID MISTAKES WITH TIMELY DEPOSITS
EMPLOYEE BENEFITS INSIDER Spring 12 AVOID MISTAKES WITH TIMELY DEPOSITS In any qualified retirement plan, money comes in and money goes out. An area that garners Department of Labor (DOL) attention is
More informationSARSEP Salary Reduction Simplified Employee Pension
Internal Revenue Service Tax Exempt and Government Entities Employee Plans SARSEP Salary Reduction Simplified Employee Pension for Small Businesses Table of Contents What is a SARSEP?...1 Choosing a SARSEP....1
More informationAmerican Benefits Council Hot Topics for 401(k) Sponsors October 9, 2013 2:00 3:30 pm ET
American Benefits Council Hot Topics for 401(k) Sponsors October 9, 2013 2:00 3:30 pm ET The Real Reason to Offer a Roth 401(k) Plan Peanut Butter & Jelly Sandwiches and 401(k) Non- Discrimination Testing
More informationBenefits Practice Resource Center
Benefits Practice Resource Center Reproduced with permission from Benefit Practitioners Strategy Guide, BPRC,, 06/08/2015. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
More informationCash or Deferred 401(k) Plan
The Basics Any profit sharing or stock bonus plan that meets certain participation requirements of IRC Sec. 40(k) can be a cash or deferred plan. An employee can agree to a salary reduction or to defer
More informationEmployee Benefits for the Closely Held Business
College of William & Mary Law School William & Mary Law School Scholarship Repository William & Mary Annual Tax Conference Conferences, Events, and Lectures 21 Employee Benefits for the Closely Held Business
More informationNew Comparability Plan
Raymond James John Dulay Financial Advisor 550 W. Washington Blvd. Suite 1050 Chicago, IL 60661 312-869-3889 888-711-4301 John.Dulay@raymondjames.com www.truenorthretirementpartners.com New Comparability
More informationPlan Design Report TABLE OF CONTENTS
Plan Design Report Disclaimer: Employee Fiduciary is providing this report for projection purposes only. The plan design illustrations contained with this report are not based on legal plan documents nor
More informationAlerus Retirement Solutions Plan Administration Guide
Alerus Retirement Solutions Plan Administration Guide Introduction This guide provides a summary of procedures, documents, compliance testing, and government reporting related to qualified plans that will
More informationIRS Issues Final 401(k) and 401(m) Regulations
Important Information Plan Administration/Operation March 2005 IRS Issues Final 401(k) and 401(m) Regulations WHO'S AFFECTED These rules affect 401(k) plans. They also affect other types of defined contribution
More informationCRS Report for Congress
Order Code RS21451 Updated February 6, 2004 CRS Report for Congress Received through the CRS Web Retirement Savings Accounts: President s Budget Proposal for FY2005 Summary Patrick J. Purcell Specialist
More informationIf your plan has not been updated to reflect EGTRRA, the plan needs to be revised.
1) Has your plan document been updated within the past few years to reflect recent law changes? If your plan has not been updated to reflect EGTRRA, the plan needs to be revised. Laws related to retirement
More informationRetirement Plan Choices and Design Options
Richard A. Naegele Attorney at Law Fellow, American College of Employee Benefits Counsel 35765 Chester Road Avon, OH 44011-1262 Main: (440) 695-8000 Direct: (440) 695-8074 Fax: (440) 695-8098 Email: RNaegele@WickensLaw.com
More informationPROTOTYPE SIMPLIFIED EMPLOYEE PROTOTYPE PLAN
PROTOTYPE SIMPLIFIED EMPLOYEE PROTOTYPE PLAN PROTOTYPE SIMPLIFIED EMPLOYEE PENSION PLAN AGREEMENT ARTICLE I Adoption and Purpose of Plan 1.01 Adoption of Plan: By completing and signing the Adoption Agreement,
More informationSIMPLIFIED. Employee Pension Plan. John Hancock Investments. Your SEP/SARSEP retirement plan guide for small businesses and self-employed individuals
John Hancock Investments SIMPLIFIED Employee Pension Plan Your SEP/SARSEP retirement plan guide for small businesses and self-employed individuals EMPLOYER DOCUMENTS Employer information This kit contains
More informationSchwab SEP-IRA Basic Plan Document
Schwab SEP-IRA Basic Plan Document Table of Contents This document contains the legal provisions of your Schwab SEP-IRA Plan. Please keep it in a place where you can easily find and refer to it. Definitions.......................................................
More information401(k) Plans for Business Owners
401(k) Plans for Business Owners Flexible options for companies of all sizes Because large corporations spearheaded the growth of 401(k) plans, many closely held business owners assume this type of plan
More informationDiscovery Benefits Non-Discrimination Testing Guide
Discovery Benefits Non-Discrimination Testing Guide 1 Discovery Benefits Non-Discrimination Testing Guide Table of Contents When to Perform Testing...3 Controlled and Affiliated Service Groups...3 Cafeteria
More informationClient Memorandum. What You Need to Know About the Final 401(k) and 401(m) Regulations By: Ann M. Kim, Carol Hines Wacaser and David Wolfe
Client Memorandum HR Law/Employee Benefits March 2005 What You Need to Know About the Final 401(k) and 401(m) Regulations By: Ann M. Kim, Carol Hines Wacaser and David Wolfe In August 2003, we distributed
More informationSAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN TABLE OF CONTENTS
SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2 0 1 4 TABLE OF CONTENTS ANNUAL COMPLIANCE SUMMARY ACTION ITEMS CHECKLIST COMPOSITION OF NET ASSETS AND CASH FLOW SUMMARY PLAN SPECIFICATIONS EMPLOYEE CENSUS
More informationG Employee Benefits Alert
G Employee Benefits Alert August 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 (the Act ) ushers in the most significant
More informationYOUR COMPANY 401(k) PLAN
YOUR COMPANY 401(k) PLAN Paychex... Your Essential Partner We are pleased to offer this brochure as an overview to your company-sponsored 401(k) plan. The following pages outline your roles and responsibilities
More informationFAQs REGARDING DESIGNATED ROTH ACCOUNTS
FAQs REGARDING DESIGNATED ROTH ACCOUNTS These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed
More informationRetirement Solutions for Your Business
Retirement Solutions for Your Business Our Service Warranty We promise to provide quality service in a competent, capable and effective manner. If we don t, we ll either fix the problem or we ll waive
More informationNew Comparability Plan: A New Paradigm in Retirement Planning for Small- Business Owners by Keith R. Fevurly, CFP, J.D., LL.M.
New Comparability Plan: A New Paradigm in Retirement Planning for Small- Business Owners by Keith R. Fevurly, CFP, J.D., LL.M. Executive Summary A profitable, closely held small-business owner not only
More informationSIMPLIFIED EMPLOYEE PLAN
SIMPLIFIED EMPLOYEE PLAN SIMPLIFIED EMPLOYEE PENSION PLAN AGREEMENT ARTICLE I Adoption and Purpose of Plan 1.01 Adoption of Plan: By completing and signing the Adoption Agreement, the Employer adopts the
More informationGIVE YOUR 401(k) PLAN A BOOST
GIVE YOUR 401(k) PLAN A BOOST By: Charles M. Lax, Esq. I. THE BASICS A. Traditional 401k Plan 1. Features a. Employees are permitted to make pre-tax contributions b. The maximum deferral permitted in 2016
More information403(b) Plan Fundamentals:
403(b) Plan Fundamentals: Your guide to compliance For Institutional Investor Use Only. Not for Use With or Distribution to the Public. How TIAA-CREF helps Our comprehensive suite of fiduciary and compliance
More informationA Primer on the New Proposed 401(k) Regulations and Final Catch-Up Contribution Regulations. Client Teleconference October 23, 2003
A Primer on the New Proposed 401(k) Regulations and Final Catch-Up Contribution Regulations Client Teleconference October 23, 2003 Presented by: Howard Clemons Kurt Lawson Keith Kost Christopher Crouch
More informationBlaze SSI Default DB AND/OR DC PLAN Valuation as of December 31, 2012 IRC401(k) ADP Test. Number of Participants
Salary Group Blaze SSI Default IRC401(k) Test Number of Participants Average* Deferral As %Pay Highly Compensated 3 8.52% Non-Highly Compensated 5 4.55% Total Plan 8 6.04% IRC401(k) Average Deferral Percentage
More informationQualified Retirement Plan
Qualified Retirement Plan BASIC PLAN DOCUMENT 158198 12/10 QUALIFIED RETIREMENT PLAN AND TRUST BASIC PLAN DOCUMENT (EGTRRA) Table Of Contents DEFINITIONS...1 ACP Test Safe Harbor Matching Contributions...1
More informationI. Plan Adoption. A. Formal Adoption of the Plan. B. Plan Approval. C. Bonding Requirements
Introduction This Guide is a quick reference tool for 401(k) defined contribution qualified retirement plan plan administrators. Under all 401(k) retirement plans, the plan administrator is the person
More informationPlanning for Retirement Needs. Profit-Sharing Plans, 401(k) Plans, Stock Bonus Plans, and ESOPs Chapter 5
Planning for Retirement Needs Profit-Sharing Plans, 401(k) Plans, Stock Bonus Plans, and ESOPs Chapter 5 Chapter 5: Profit Sharing Profit sharing 401(k) Stock bonus ESOP Why Profit Sharing? Discretionary
More informationINTERNAL REVENUE SERVICE TAX EXEMPT AND GOVERNMENT ENTITIES
Compensation By: Ed Mitte, John Old, and Sarah Rumsey Reviewers: Al Reich and Mitch Waters Overview INTERNAL REVENUE SERVICE TAX EXEMPT AND GOVERNMENT ENTITIES Introduction Compensation is used for many
More informationDEFINED CONTRIBUTION VOLUME SUBMITTER PLAN AND TRUST BASIC PLAN DOCUMENT
DEFINED CONTRIBUTION VOLUME SUBMITTER PLAN AND TRUST BASIC PLAN DOCUMENT TABLE OF CONTENTS SECTION 1 PLAN DEFINITIONS 1.01 Account.... 1 1.02 Account Balance... 1 1.03 ACP Test (Actual Contribution Percentage
More informationHughes Hubbard & Reed LLP
Hughes Hubbard & Reed LLP EMPLOYEE BENEFITS ADVISORY May 2001 Required GUST Amendments for Qualified Retirement Plans The deadline for adopting GUST amendments to qualified retirement plans and submitting
More information2015 retirement plan summary
Understanding the differences among retirement plan alternatives 2015 retirement plan summary If you re establishing a new retirement plan, selecting the appropriate design is the first step in providing
More information401(k) PROFIT SHARING SOLUTIONS
401(k) PROFIT SHARING SOLUTIONS Most small business owners are concerned about retirement, both for themselves and for their employees. The question isn t whether to implement a retirement plan. The two
More informationComparison of SEPS, SARSEPs and SIMPLE IRA Plans
General Comments Applicable Code Sections Employer sets up IRAs for eligible employees and makes contributions to the IRAs. Amount of the contributions can be discretionary. 408(k) Generally, IRAs (set
More information401(k) Sponsor Adoption Guide. The Solution for your Company s Retirement Plan
11 Slavic Sponsor Guide 11/13/11 9:19 AM Page 1 401(k) Sponsor Adoption Guide The Solution for your Company s Retirement Plan 2 slavic401k.com The Internet connection to your future Your PEO Strategic
More informationUPDATE EMPLOYEE BENEFITS. Retirement Plan Limits for 2006 CONTACTS. Maximum Qualified Retirement Plan Dollar Limits
Snell & Wilmer L.L.P. EMPLOYEE BENEFITS UPDATE www.swlaw.com December 2005 CONTACTS THOMAS R. HOECKER 602.382.6361 thoecker@swlaw.com MARVIN S. SWIFT, JR. 602.382.6211 mswift@swlaw.com NANCY K. CAMPBELL
More informationThe Business Planning Group Inc. Retirement Planning Guide 2015 Edition
2015 Edition Table of Contents Why you should help your clients set up a Qualified Retirement Plan 3 Overview of Qualified Plans 4 Chart of Qualified Retirement Plan Options 5 Individual Retirement Account
More information401(k) Plan Administration: Fiduciary Responsibility and The Impact of Changes to Your Plan
401(k) Plan Administration: Fiduciary Responsibility and The Impact of Changes to Your Plan Presented by: Kirsten L. Vignec Shareholder Hill Ward Henderson Introduction Our discussion today focuses on
More informationDefinitions of Compensation for Retirement Plans June 20, 2012. Presented By: Aimee Nash Sr. Writer/Analyst, ftwilliam.com
Definitions of Compensation for Retirement Plans June 20, 2012 Presented By: Aimee Nash Sr. Writer/Analyst, ftwilliam.com Continuing Education IRS program number, 2 credits: BVY5C-Q-00002-1 2-O Qualifying
More informationQualified Retirement Plan and Trust Defined Contribution Basic Plan Document 03
Qualified Retirement Plan and Trust Defined Contribution Basic Plan Document 03 PO Box 2760 Omaha, NE 68103-2760 Fax: 866-468-6268 TABLE OF CONTENTS DEFINITIONS.... 5 2009 RMD.... 5 ACP Test Safe Harbor
More informationSummary Plan Description. PetSmart, Inc. SaveSmart 401(k) Plan
Summary Plan Description PetSmart, Inc. SaveSmart 401(k) Plan As Revised Effective January 1, 2010 TABLE OF CONTENTS INTRODUCTION... - 1 - Type of Plan... - 1 - Plan Sponsor... - 1 - Purpose of This Summary...
More informationGlossary of Qualified
Glossary of Qualified Retirement Plan Terms 401(k) Plan: A qualified profit sharing or stock bonus plan under which plan participants have an option to put money into the plan or receive the same amount
More information401(k) Summary Plan Description
401(k) Summary Plan Description WELLSPAN 401(K) RETIREMENT SAVINGS PLAN SUMMARY PLAN DESCRIPTION I I PRIOR TO II III I TABLE OF TO YOUR PLAN What kind of Plan is this? 5 What information does this Summary
More informationComparing retirement plans
The right choice for the long term Comparing retirement plans Determine the plan type that will best meet your and your organization s needs. January 2012 Annual contribution limits at a glance 1, 2 SEP
More informationForm 1099-R Series for Corrective Distributions, Roth Distributions and Other Unusual Transactions. Agenda 10/9/2014
Form 1099-R Series for Corrective Distributions, Roth Distributions and Other Unusual Transactions William C. Grossman, ERPA, QPA, GFS,APA, MBA McKay Hochman Consulting Provided by DST 1 Agenda Form 1099-R
More informationIRS Issues Proposed Rules and Sample Notice Regarding Automatic Enrollment Arrangements
December 2007 / Issue 56 A legal update from Dechert s Employee Benefits and Executive Compensation Group IRS Issues Proposed Rules and Sample Notice Regarding Automatic Enrollment Arrangements d The Internal
More informationemployee benefits update february/march 2013
employee benefits update february/march 2013 It s time to reap the benefits of matching contributions Can you define compensation? A review of IRS definitions that affect qualified plans Offsetting stagnant
More informationopportunities. partners. experience.
CP Qualified Plans ADVANTA Advisor Planning Concept Qualified plans provide essential retirement benefits for the employer and employee and can also provide death and disability benefits. CP ADVANTA opportunities.
More informationArgument for planning early for retirement is compelling
CHAPTER 13 Basic Structure of Retirement Income INTRODUCTION Argument for planning early for retirement is compelling Nationwide Financials Survey (2011): Americans are becoming increasingly concerned
More information2010 SIMPLE vs SAFE HARBOR 401(k) vs TRADITIONAL 401(k) COMPARISON
2010 SIMPLE vs SAFE HARBOR vs TRADITIONAL COMPARISON John M. Peterson, CPA Iris Dodson, CPA (757) 457-8440 (757) 457-8444 SIMPLE Maximum size of adopting employer No more than 100 employees earning at
More informationPlan sponsors are interested in ADP/ACP safe harbor
Nondiscrimination Testing How Safe Is Your ADP/ACP Safe Harbor? Plan sponsors are interested in actual deferral percentage (ADP) and actual contribution percentage (ACP) safe harbor designs primarily because
More informationOctober 28, 2015. Copyright 2015 by Richard A. Naegele, J.D., M.A. Copyright 2015 by Richard A. Naegele, J.D., M.A.
by Richard A. Naegele, J.D., M.A. Wickens, Herzer, Panza, Cook & Batista Co. 35765 Chester Road Avon, OH 44011-1262 Phone: (440) 695-8074 Email: RNaegele@WickensLaw.com Web: www.wickenslaw.com 1217192.pptx
More informationA GUIDE TO EXECUTIVE DEFERRED. An Employer s Quandry: How do we get more Deferred Compensation to Executives? Qualified Plans
An Employer s Quandry: How do we get more Deferred Compensation to Executives? A GUIDE TO EXECUTIVE DEFERRED COMPENSATION In business, it is often difficult enough to determine what salaries and short
More informationColumbia Threadneedle Investments SEP Simplified Employee Pension Plan
Columbia Threadneedle Investments SEP Simplified Employee Pension Plan This kit contains: Part I. Instructions and Basic Plan Document Part II. Eligibility form and Adoption Agreement Part III. Employee
More informationRoth 401(k) Amendment to the UBS Prototype 401(k) Plan
ab Roth 401(k) Amendment to the UBS Prototype 401(k) Plan Steps to Adopt the Discretionary Roth 401(k) Amendment to the UBS Prototype 401(k) Plan Employers may offer a Roth (i.e., after-tax) contribution
More informationChoosing a Retirement Plan for Your Business
january 2014 Choosing a Retirement Plan for Your Business introduction Table of Contents Building Your Retirement Starting and maintaining a retirement plan for your business can be easier than you think
More informationBELFINT, LYONS & SHUMAN, P.A.
BELFINT, LYONS & SHUMAN, P.A. EMPLOYEE BENEFIT PLAN AUDIT - INFORMATION REQUEST FORM Although our retirement plan audits are tailored to meet the specifics of each plan design and plan sponsor s demographics,
More informationSAIIA CONSTRUCTION COMPANY LLC. Saiia Construction Company LLC 401(k) Profit Sharing Plan SUMMARY PLAN DESCRIPTION
SAIIA CONSTRUCTION COMPANY LLC Saiia Construction Company LLC 401(k) Profit Sharing Plan SUMMARY PLAN DESCRIPTION January 1, 2014 TABLE OF CONTENTS INTRODUCTION... 1 GENERAL PLAN INFORMATION... 1 A. Agent
More informationSUMMARY PLAN DESCRIPTION
SUMMARY PLAN DESCRIPTION INTERSTATE BATTERIES PROFIT SHARING & 401(K) PLAN This Summary Plan Description (the SPD), including the Summaries of Material Modification (SMM), is meant to describe highlights
More informationWhat s the Easiest Way to Pass a 401(k) NONDISCRIMINATION TEST? Transamerica. Master Retirement. POWER CHOICE FREEDOM
What s the Easiest Way to Pass a 401(k) NONDISCRIMINATION TEST? Transamerica. Master Retirement. POWER CHOICE FREEDOM Skip it with SAFE HARBOR contributions. It s true. A company can forego 401(k) nondiscrimination
More informationHow To Test A Safe Harbor Plan
Profit Sharing Allocation Methods - The Better Part of Discretion A White Paper by Manning & Napier www.manning-napier.com Unless otherwise noted, all figures are based in USD. 1 Most Profit Sharing/401(k)
More informationADP and ACP safe harbor plans require that a nondiscriminatory. ADP/ACP Safe Harbor Compensation Compliance Confusion
VOLUME 42, NUMBER 1 JOURNAL of PENSION PLANNING & COMPLIANCE Editor-in-Chief: Bruce J. McNeil, Esq. SPRING 2016 JPPC ADP/ACP Safe Harbor Compensation Compliance Confusion DANIEL SCHWALLIE Daniel Schwallie,
More information